Ontrak(US:OTRK)2024-08-14 20:45Revenue Performance - Revenue for Q2 2024 was $2.5 million, a decrease of 17% from $3.0 million in Q2 2023, and $5.1 million for the first half of 2024, down 7% from $5.5 million in the same period last year [146]. - Total revenue decreased by $0.5 million, or 17%, in the three months ended June 30, 2024 compared to the same period of 2023, and decreased by $0.4 million, or 7%, in the six months ended June 30, 2024 compared to the same period of 2023 [159]. - Government revenue decreased by $0.414 million, or 21%, in the three months ended June 30, 2024 compared to the same period in 2023 [158]. Cash Flow and Liquidity - Cash flow from operations for Q2 2024 was $(4.5) million, an improvement from $(5.1) million in Q2 2023, and $(7.7) million for the first half of 2024, up from $(10.1) million in the same period last year [147]. - As of June 30, 2024, total cash was $7.3 million, with a working capital of approximately $8.1 million [170]. - Net cash used in operating activities for the six months ended June 30, 2024 was $7.7 million, an improvement from $10.1 million in the same period in 2023 [178]. - Net cash provided by financing activities was $5.4 million for the six months ended June 30, 2024, compared to $10.6 million in 2023, primarily from borrowings under the Keep Well Agreement [180]. - The average monthly cash burn rate from operations for the six months ended June 30, 2024 was $1.3 million [170]. - The company plans to continue exploring other sources of capital and managing operating costs to increase liquidity [174]. - The company expects its cash on hand and the $5.0 million of Demand Notes from Acuitas will be sufficient to meet obligations for at least the next 12 months [177]. Operating Expenses and Profitability - Total operating expenses decreased by $1.1 million, or 17%, in the three months ended June 30, 2024 compared to the same period in 2023 [164]. - Total operating expenses decreased by $4.1 million, or 26%, in the six months ended June 30, 2024 compared to the same period in 2023 [165]. - Gross profit decreased by $0.5 million, or 25%, in the three months ended June 30, 2024 compared to the same period in 2023, and decreased by $0.5 million, or 14%, in the six months ended June 30, 2024 compared to the same period in 2023 [162]. - The gross profit margin decreased to 66% for the three months ended June 30, 2024 compared to 73% for the same period in 2023 [161]. - Operating loss improved by $0.581 million, or 13%, in the three months ended June 30, 2024 compared to the same period in 2023 [163]. Customer and Program Developments - The callable outreach pool for the WholeHealth+ program decreased by 31% to 7,511 at June 30, 2024, from 10,879 at June 30, 2023, primarily due to a health plan customer discontinuing services [148]. - A new customer agreement was announced in May 2024 with a regional Medicaid health plan for WholeHealth+ and Ontrak Engage solutions, pending state approval [148]. - The callable outreach pool for the Ontrak Engage program was 589 at June 30, 2024, reflecting the launch of this program on an à la carte basis in 2024 [149]. - The company aims to increase eligible members by signing new contracts and identifying more eligible members within existing contracts [150]. Debt and Interest Expenses - The company incurred $5.9 million in debt issuance costs for the three and six months ended June 30, 2024, related to Demand Notes [167]. - As of June 30, 2024, $6.9 million of secured debt was outstanding under the Keep Well Agreement, with $4.8 million payable after August 30, 2025 [171]. - Interest expense, net decreased from $2.223 million in the three months ended June 30, 2023 to $0.326 million in the three months ended June 30, 2024 [157]. - Interest expense, net decreased to $(326) for the three months ended June 30, 2024, an 85% reduction from $(2,223) in 2023, primarily due to a lower average outstanding loan balance [168]. Research and Development - Research and development costs decreased by $0.5 million, or 33%, in the three months ended June 30, 2024 compared to the same period in 2023 [163].